TMI Blog1974 (4) TMI 109X X X X Extracts X X X X X X X X Extracts X X X X ..... n order of the District Magistrate under Section 7 (2) of the U. P. (Temporary) Control of Rent and Eviction Act, 1947 (hereinafter referred to 'as the Act') and he vacated the accommodation on 2-6-1967. He was in arrears of rent amounting to ₹ 50. Mohd. Ishaq applied to the District Magistrate on 6-6-1967 for an order of allotment under Section 7 (2) and such an order was passed in his favour on 26-8-1967 and the order was issued on 28-8-1967. Prior to the passing of the allotment order the landlord made a private contract of tenancy with the present appellant, Abdul Hameed, who agreed to pav a monthly rent of ₹ 4 per month and also paid the arrears due from the previous tenant. There is no dispute in that Abdul Hameed occupied the shop before the passing of the allotment order. It is also not in dispute that neither the landlord nor the previous tenant, Jamal Waris, had intimated to the District Magistrate under Section 7 (1) of the Act that the accommodation had fallen vacant. 2. When the District Magistrate took proceedings under Section 7-A of the Act for the eviction of the appellant and for putting the allottee in possession, the appellant instituted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he landlord to himself make a contract with any person for letting out the accommodation. The restriction imposed by Sub-section (2) of Section 7 comes into play only after the District Magistrate passes a general or special order. When no such order exists, the landlord can unhesitatingly exercise the fundamental right guaranteed to him under Article 19 of the Constitution and if he decides to exercise his fundamental right his action cannot be deemed to be illegal simply because the District Magistrate could have passed a general or special order in respect of the accommodation. When a person possesses the fundamental right to use his property in any manner he likes, he need not await the orders of the public authorities and can act under and in accordance with the ordinary law, namely, the Transfer of Property Act and the Contract Act. When the landlord has the right to make a contract in respect of his property and such contract is valid, the accommodation shall be deemed not to be vacant on the date the accommodation is actually occupied by the lessee and when the accommodation is not vacant the District Magistrate cannot have the power under Section 7 (2) to pass any general ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of an order under Sub-section (2) the landlord is free to exercise his ordinary rights, that is, to let out the accommodation. Under Sub-section (2) of Section 7 the District Magistrate can pass a general or special order requiring a landlord to let or not to let to any person any accommodation which is or has fallen vacant or is about to fall vacant. Ordinarily, the District Magistrate shall not pass an order directing the landlord not to let out the accommodation to a specific person. Such an order may be regarded as discriminatory and, therefore, invalid. Consequently, such an order would generally be in a general form directing the landlord not to let out the accommodation to any one without the prior permission or order of the District Magistrate. The special order contemplated by the sub-section would invariably be in favour of a particular person. The difference between the general and special order is thus material. 10. Consequently, where no general order under Section 7 (2) of the Act has been passed, the only liability placed upon the landlord and the previous tenant is to give intimation to the District Magistrate under Section 7 (1) of the vacancy, and for disregar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... feated. 11. Coming to the Contract Act Section 10 thereof provides that all agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object and are not hereby expressly declared to be void.'' Consequently, agreements which are not for a lawful consideration and with the lawful object, or which are expressly declared to be void, are not contract, that is an agreement enforceable under the law. There being no provision in the Act declaring private agreements of tenancy to be void, the later part of Section 10 is inapplicable. Section 23 of the Contract Act, however, lays down which considerations and objects of an agreement are lawful and which are not. The material part of Section 23 runs as below:-- The consideration or object of an agreement is lawful, unless-- it is forbidden by law; or is of such a nature that, if permitted, it would defeat the provisions of any Jaw; or is fraudulent;-- In each of these cases, the consideration or object of an agreement is said to be unlawful. Every agreement of which the object or consideration is unlawful, is void. 12. The expression & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an order by a competent authority having the force of law. Consequently, where any agreement is forbidden by an order of the competent authority having the force of law, it shall be an agreement forbidden by law as contemplated by Section 23 of the Contract Act. This shall be irrespective of whether the general or special order of the District Magistrate under Section 7 (2) is or is not an administrative order. It is an order passed under Section 7 (2) of the Act which has the force of law. Such an order has also the sanction of the law because the illegal act is punishable under Section 8 of the Act. Further, as already indicated above, any private agreement in contravention of the general or special order under Section 7 (2) of the Act is of such a nature that, if permitted, it would defeat the provisions of the Act. 14. One of the recognised forms of subordinate legislation is by issue of a general order by an authority to which such power has been delegated under the enactment. For example, Section 3 of the Essential Commodities Act, 1955, delegates authority to the Central, Government to legislate on matters mentioned therein by issue of general orders. The Central Governm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... verlooked and in the eye of law, the accommodation shall be deemed to be vacant such that the District Magistrate, can pass special order under Section 7 (2), as was done in the present case in favour of Mohd. Ishaq, and if necessary steps under Section 7-A of the Act can be taken to put the allottee into possession of the accommodation. 16. In the Full Bench case of 1963 All LJ 406 = (AIR 1964 All 1) (supra) it was held that the contract of tenancy between the landlord and a third person is not void and consequently where a person has taken possession of the accommodation on the basis of the private agreement of tenancy the accommodation cannot be deemed to be vacant and the District Magistrate has no power to pass an order of allotment under Section 7 (2) and no steps can be taken under Section 7-A to put the allottee in possession. This rule, according to the Full Bench, shall be applicable irrespective of whether any general order under Section 7 (2) had or had not been passed, provided that there was a private agreement of tenancy and the accommodation was occupied before the passing of the allotment order. Further no proceeding under Section 7-A for dispossession of that p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... special law, namely, the present Act. 20. The Full Bench was also guided by the factor that the making of the private contract of tenancy was prohibited by the District Magistrate and not by the law, and that the order of the District Magistrate may have the force of law but was not a law. The meaning and scope of the term 'law' has already been commented upon above. An order passed by a competent authority under the statutory provisions has the force of law, all the more, when contravention of the provisions of the Act has been made punishable under Section 8 of the Act. 21. The Full Bench also laid stress upon the fact that a lease involves two agreements; one by the landlord agreeing to let his accommodation be used by the tenant in consideration of the latter's paying him money, called rent, and the other by the tenant agreeing to pay to the landlord money, called rent, in consideration of the latter's allowing him to use his accommodation. Desai. C. J. observed that the object of one agreement was to acquire money and the object of the other agreement was to carry on business and neither of the two objects was unlawful within the meaning of Section 23 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he courts of law. It is said that the injunction order did not stand in the category of law and on similar grounds the order of the District Magistrate may have the force of law but cannot be treated to be law within the meaning of Section 23. Under Article 19(1)(f) of the Constitution the State Legislature can place reasonable restrictions on the exercise of the right of a citizen to acquire, hold and dispose of property either in the interest of the general public or for the protection of the interest of any scheduled tribe. Where in the interest of general public it is not necessary to impose a restriction throughout the State the State Legislature can delegate this power to a subordinate authority like the District Magistrate and the delegation of power can be in one form or the other. In the instant case, District Magistrates have been given the power to issue a general order under Section 7 (2) of the Act prohibiting the landlord from entering into an agreement of tenancy without his permission or consent. It may be necessary to impose this restriction in, a few districts and not all, or in certain areas of the district. Consequently, an order passed by the District Magistrat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Magistrate under Section 7 (2) of the U. P. (Temporary) Control of Rent and Eviction Act, 1947. Consequently, while expressing our opinion on the question referred to the larger Bench, we must restrict ourselves to cases where such a general order has been passed. In respect of such cases, we respectfully differ from the view expressed in the above Full Bench case of 1963 All LJ 406 = (AIR 1964 All 1) (supra) and are of opinion that an agreement of tenancy made in violation of the general order issued by the District Magistrate under Section 7 (2) is void and the person to whom an accommodation governed by the U. P. (Temporary) Control of Rent and Eviction Act has been let out under such an agreement is liable to be proceeded against under Section 7-A at the instance of the person in whose favour the allotment order has been passed by the District Magistrate either prior or subsequent to the date on which the accommodation was unauthorisedly let out by the landlord. Our answer to the question referred to this Bench is in the affirmative. Prem Prakash, J. 28. I concur with my Lord the Chief Justice. Jagmohan Lal, J.:-- (With P.N. Bakshi, J.) The following point has been re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y him. That such a general order exists in respect of this district would also be evident from a decision of this Court in AIR 1964 All 395 in which that order dated 22-5-1947 passed by the then District Magistrate, Lucknow has been extracted. 30. We have therefore to see whether the private letting out of the accommodation by the landlord to the plaintiff-appellant in contravention of the said general order passed by the District Magistrate is illegal so as to confer no rights on him. Secondly whether the occupation of the accommodation by the appellant in pursuance of that illegal agreement of tenancy made by the Landlord is no occupation in the eye of law and the accommodation shall be deemed to be vacant which could be allotted by the District Magistrate to the respondent under his allotment order issued on 28-8-1967. Lastly, we have to consider whether in order to enforce his order of allotment and put the respondent in occupation of the accommodation the District Magistrate could take proceedings against the appellant under Section 7-A by way of ejecting him and using necessary force, if required, for this purpose. The relevant provisions of the Act are contained in Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... odation is not vacated within the time allowed or such extended period, as the District Magistrate may grant, the 'District Magistrate may evict or cause to be evicted the person or persons and use such force as may be necessary for carrying out the order, and also put the person, entitled under Sub-section (2) of Section 7, in occupation of the accommodation. Sub-section (1) of Section 8 provides: Any person who contravenes any of the provisions of this Act, or any order made in pursuance thereof, shall be punishable on conviction with simple imprisonment for a term which may extend to six months or with fine upto ₹ 5,000 or with both. 31. The general order passed by the District Magistrate under Sub-section (2) of Section 7 is usually in the form of directing the landlords in general not to let out any accommodation without his written permission. A special order contemplated by the said sub-section relates to specific accommodation and is passed in favour of a particular person which in terms of this sub-section requires the landlord to let out the accommodation to the person in whose favour that order has been passed. This order is popularly known as allotm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person before an allotment order is actually passed by the District Magistrate that allotment order would be infructuous and void as there was no vacancy at that time. Such an allotment order could not be enforced by the District Magistrate by taking recourse to the procedure prescribed under Section 7-A. 34. If however the landlord had not actually exercised his right of letting out the accommodation privately to any person before an order of allotment order was passed by the District Magistrate under Section 7 (2), his freedom of action in this matter comes to an end and after that he is bound to comply with that order and to let out the accommodation to the allottee and not to any other person. If he lets out the accommodation to any other person in violation of that allotment order, the tenant would not acquire any rights under the agreement of tenancy and he would be liable to be ejected by the District Magistrate under Section 7-A. After ejecting him the District Magistrate can put the allottee in possession. So on the facts of Udhoo Dass's case the private contract of tenancy between the landlord and the tenant Prem Prakash was valid. To that extent I am in respectfu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the tenant is still liable to be proceeded against under Section 7-A. I shall now examine the reasons given by the Full Bench in support of its view and state my own reasons for the different view. 37. The reasons given by the Full Bench in support of its view may be summarised as follows : 1. An order of allotment passed by the District Magistrate under Section 7 (2) only directs the landlord to let out the accommodation to the allottee. After that it is for the landlord to enter into a contract of tenancy with the allottee. But if he does not do so, the allotment order by itself does not create the relationship of landlord and tenant. 2. For the breach of an order passed by the District Magistrate under Section 7 (2) the landlord may be prosecuted and punished under Section 8 and possibly the tenant to whom the accommodation is let out by the landlord in contravention of that order can also be punished under Section 8 read with Section 11 of the Act if the necessary ingredients of abetment are established. But that does not render the contract void. 3. A contract prohibited by law is of course an illegal and unenforceable contract. But there is no provision whatsoe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gistrate under Section 7 (2) which is popularly known as an order of allotment is in terms of this sub-section a direction issued to the landlord to let out the accommodation to the allottee. But it is not quite correct to say that the relationship of landlord and tenant can be created only when the landlord is pleased to enter in a contract of tenancy with the allottee and that if he is not willing to do so for reasons best known to him no tenancy is created. If an allotment order has been validly passed and the allottee lawfully enters or is put in possession, a statutory tenancy is created even though the landlord without any justification refuses to enter in a contract of tenancy with him. Reference may be made to Anand Niyas (P.) Ltd. v. Anandji Kalyanji's Pedhi, AIR 1965 SC 414. 2. The landlord and tenant, of course incur criminal liability under Sections 8 and 11 by making a private agreement of tenancy in contravention of a general order passed by the District Magistrate. But criminal action against them is not the only remedy provided under the Act. The person in occupation of the accommodation under such agreement is liable to be ordered to vacate the premises unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n violation of that Order would be illegal. 4. Desai C. J. concedes that it is the act of entering into a contract of tenancy in contravention of an order made under Section 7 (2) by the District Magistrate that may be said to be prohibited. But it is an act forbidden by the District Magistrate and not by law within the meaning of Section 23. The District Magistrate does not prohibit the making of such a private contract of tenancy by making request to the landlord. He does so by passing a statutory Order under Section 7 (2) which is law within the meaning of Section 23, Contract Act as we shall just see. 5. It may be stated that even if the making of a contract is prohibited by a provision having the force of law, a contract made in violation of such provision will be an illegal contract. However, to say that a general Order passed by the District Magistrate under Section 7 (2) is only an administrative order or to place it on the same footing as an injunction order passed by the Civil Court in a particular case, is to overlook the essential legal character of delegated legislation. In modern times, a large volume of law is made through subordinate or delegated legislation w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the plaintiff ₹ 1,500. When the plaintiff filed a suit to recover the money on the basis of that agreement, it was held that the subletting of the licence having been made punishable as an offence is to be deemed as an act contrary to law within the meaning of Section 23, Contract Act and the claim to recover the amount due under such an agreement could not therefore be enforceable in a court of law. The same view was taken by the Madras High Court in (1903) ILR 26 Mad 430. The courts do not legislate and they only adjudicate on individual disputes in accordance with law. So an injunction order passed by a civil court cannot be deemed as statutory Order. The cases in which it has been held that a sale held in disobedience of an injunction order passed by Civil Court is not void, are therefore of no help in deciding the point under consideration. 6. In AIR 1939 Rang 305 (FB) the question was whether a person who had become a monk under the Buddhist law could buy and sell property though under the personal law governing such a monk there was a prohibition for monks being engaged in a trade. The monk having entered in a trade agreement the question arose whether the agree ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y disabling the District Magistrate from allotting the accommodation to a person whom he thinks it should be allotted under Rule 3 within a period of thirty days of the receipt of the intimation sent by the landlord under Section 7 (1) (a) and thereafter the District Magistrate would also be helpless to dispossess that person by taking recourse to the proceedings under Section 7-A. If such a contract is allowed to stand, it would defeat the provisions of the Act within the meaning of clause two of Section 23. 8. If an accommodation has been let out by the landlord in violation of a general Order issued by the District Magistrate under Sub-section (2) the tenant can evidently be proceeded against under Section 7-A. There is no reason to draw a line that such proceedings can be taken only if besides a general order an order of allotment has also been passed by the District Magistrate prior to that subletting. In my opinion, the proceedings under Section 7-A against a person to whom the accommodation has been let out by the landlord in violation of the general Order are not dependent on the passing of an order of allotment. Even without passing such an order of allotment the Distri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Full Bench decision, a Division Bench of this Court consisting of Satish Chandra and P.N. Bakshi JJ. held in the case of AIR 1973 All 247 that where a general order has been passed by the District Magistrate under Section 7 (2) prohibiting the landlord from letting out any accommodation then, without an allotment order the letting in defiance of such a general order would be unauthorised and in the eyes of Law there was vacancy; and the Rent Control and Eviction Officer had jurisdiction to make an allotment order in respect of the premises. In my opinion, this view though it runs counter to the view of the Full Bench in Udhoo Dass's case 1963 All LJ 406 = (AIR 1964 All 1) (FB) is correct view. The learned Judges instead of formally recording a dissent against that Full Bench decision and referring to a larger Bench chose to observe that the Full Bench was not of material assistance in deciding the point involved in that case. It was for this reason that the present reference to a larger Bench was felt necessary. I am therefore of the opinion that an agreement of tenancy made in violation of a general order issued by the District Magistrate under Section 7 (2) is void and the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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